Wales Bill - Committee (2nd Day)

Part of the debate – in the House of Lords at 3:15 pm on 7th November 2016.

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Photo of Lord Bourne of Aberystwyth Lord Bourne of Aberystwyth The Parliamentary Under-Secretary of State for Communities and Local Government, The Parliamentary Under-Secretary of State for Wales 3:15 pm, 7th November 2016

My Lords, I thank noble Lords who have participated in the debate on the amendment. I thank the noble Lord, Lord Wigley, for moving it.

To fund the step change needed to achieve 3 million apprenticeship starts across the country by 2020 and to improve their quality, the Government are introducing an apprenticeship levy so that spending on apprenticeships will be double the level that it was in 2010-11 in cash terms. I think that that is something that noble Lords across the House will welcome. I recognise that some employers have concerns over the design of the levy. Following the announcement at the summer Budget of 2015, the Government consulted on its design; the consultation that took place during the autumn of that year revealed overwhelming support for the levy to be as simple as possible to operate across the United Kingdom. For this reason, it was decided that the apprenticeship levy would be based on the UK-wide definition of earnings as used for class 1 secondary employer national insurance contributions. Not only is the definition one that employers are familiar with but it is applied consistently to employers wherever they operate within the United Kingdom’s single market and is information they readily have available in their payroll. The definition also avoids considerable practical difficulties that would arise if there were different rates and thresholds of the apprenticeship levy in different parts of the United Kingdom, which appears to be the purpose of this amendment—or at least a consequence of it. However, because the charge is on the employer, it would be necessary to determine how such a system would operate for organisations working across borders or with plants in different parts of the country, such as Toyota. This would create additional and significant administrative burdens for businesses that we believe are best avoided.

That said, I can recognise the points that are being made by the noble Lords, Lord Wigley and Lord Rowlands, and the noble Baroness, Lady Gale. I thank her for her comments. It is certainly the intention for work between the Treasury and the Welsh Government to continue, as she suggested. Policy on apprenticeships is devolved to the Welsh Government; once there has been a discussion on how we ensure that Wales has a fair share of the money, it does not necessarily follow that it will be Barnettised. I rather suspect that it will not, and presumably they will look at the number of employees in different parts of the country. I am not sure that Barnett would present the right answer. But once it has been done, it is a matter for the devolved Governments of Scotland, Northern Ireland and Wales, as to how they operate the apprenticeship policy. They could presumably add more money in if they wanted to, or put in a smaller amount—that is a matter for them.

I have heard the contributions to this debate, and I understand that noble Lords want to ensure that Wales’s corner is being protected; I do too. I will ensure that a note is sent round to noble Lords who have participated in the debate so that they can see the state of play as things stand at the moment.